Registration document 2010-11 - Air France-KLM Finance

1Corporate governanceThe Board of Directors✦ comments and recommendations made by the Statutory Auditorsand, if applicable, any signifi cant adjustments resulting from audits.The Audit Committee has access to the resources required to fulfi l itsmission and may, notably, be assisted by persons from outside thecompany. ActivityDuring the 2010-11 fi nancial year, the Audit Committee met four times(four meetings in 2009-10) with an attendance rate for members of79% (75% in 2009-10). The meetings lasted an average of two hoursand thirty minutes.The following matters were notably reviewed by the Audit Committeeduring the 2010-11 fi nancial year.Review of the financial statementsThe Committee reviewed the quarterly, half-year and annual fi nancialstatements prior to their presentation to the Board of Directors. Itconducted a detailed examination of the Statutory Auditors’ report onthe half-year and annual fi nancial statements as well as the signifi cantpoints noted in audits.Internal control and internal auditAt each of its meetings, the Committee reviewed the status of internalcontrol and internal audit. Although the company is no longer requiredto comply with the obligations of the Sarbanes-Oxley Act, it continuesto maintain high standards of fi nancial disclosure and corporategovernance and a rigorous level of internal control across the Group.Risk assessmentThe Audit Committee also reviewed the following matters:✦ change in the fi nancial situation of the KLM pension funds;✦ fi nancial structure;✦ inquiries into anti-competitive practices;✦ Flying Blue debt;✦ damage to aircraft. ActivityThe Remuneration Committee met once in May 2010 (one meetingin 2009-10) and the attendance rate for members was 100%, as in2009-10.The Remuneration Committee submitted a number of proposals to theBoard of Directors, which were subsequently adopted by the Board,relating to the principles and the amounts of the fi xed and variablecompensation for the executive directors (see Compensation of theCompany Offi cers section below).❚ The Appointments Committee CompositionSince July 8, 2010, the Appointments Committee has comprisedthe following four members: Jean-François Dehecq (Chairman of theCommittee), Patricia Barbizet, Jean-Marc Espalioux and Cornelis vanLede. MissionsThe Appointments Committee is responsible for proposing candidatesto serve as members of the Board of Directors as well as to replace theexecutive directors, particularly in the event of unforeseen vacancies. ActivityDuring the 2010-11 fi nancial year, the Appointments Committee metfour times (with an attendance rate for directors of 100%) to, amongstother things, submit to the Board of Directors proposals relating to itscomposition and the staggering of mandate expiries to avoid havingto renew a substantial proportion of the Board ‘‘en masse’’. Themandates of eleven of the fi fteen Board directors effectively expiredat the end of the General Shareholders’ Meeting held on July 8, 2010.In accordance with the company’s bylaws, this General Shareholders’Meeting exceptionally decided to set Board directors’ terms of offi ceat two, three and four years in order to enable the staggered renewalof the mandates.❚ The Remuneration Committee CompositionSince July 8, 2010, the Remuneration Committee has comprisedthe following three members: Jean-Marc Espalioux (Chairman of theCommittee) Patricia Barbizet and Leo van Wijk. MissionsThe Remuneration Committee is primarily responsible for submittingrecommendations for the level of and changes to the remunerationof the executive directors. It may also be asked to comment on thecompensation of the Group’s senior executives, as well as on anypossible stock subscription or purchase option plan policies.1.1.6 Compensation of the company officers❚ Compensation for directors Board directors’ fee modalitiesBoard directors receive fees whose maximum amount was set at€800,000 by the General Shareholders’ Meeting of June 24, 2004.On the recommendation of the Remuneration Committee, the Boardof Directors decided, at its meeting of June 27, 2007, to adopt thefollowing modalities for the payment of directors’ fees:✦ €20,000 as fi xed compensation;Registration Document 2010-11 ■ Air France-KLM19